The Scottish Government’s Rent Controls don’t go far enough
The Scottish Government has had a complex relationship when it comes to protecting tenants from rent increases. It seems to blow on and off the agenda are the merest puff of change in political winds. Right now, it appears to be back on, with the SNP accepting a Green amendment to the Housing (Scotland) Bill in September that allowed Councils to designate zones of action where a rent cap could be imposed (though “mid-market rental” and student accommodation is exempt from this as are build-to-let housing which rather undermines the whole purpose of the legislation).
The rent cap was set to CPI inflation plus 1% up to a maximum of 6%. This mirrors a proposal brought in late in the 2017-2021 Parliament by then-Labour MSP Pauline McNeil. While we supported the policy then as a means of getting at least some control over the private rented sector we pointed out the flaws in this approach even then – namely that in times of relatively low inflation (i.e. below 5%, thus the rent cap being below the 6% maximum) then it would encourage landlords to increase rent above what they normally would have and up to the maximum allowed (thus the rent increase ceiling would also become the floor) and that in many cases, rents are already too high so merely limiting the increases to somewhere above inflation makes an already unaffordable rent even more unaffordable.
Better, would be our approach of linking maximum rent (not maximum rent increases) to the quality and state of repair of a home. Landlords would only be able to increase rent if they invested in their properties to make them more energy efficient and to keep them in an adequate condition. This should be combined with the approach now being taken in France (and, thankfully, being investigated in Scotland) to prevent housing that falls below a certain quality level (a floor which rises each year) from being rented out at all.
On the rent cap we have now though. Last week, new data was published on the private rented sector in Scotland and it shows wide regional disparities in the state of rent increases across Scotland’s various regions. In particular though, it shows where an above inflation rent cap that becomes a target would hit the hardest.
Had the Government’s rent cap been in place last year it would have undoubtedly benefited tenants in some areas like Dumfries & Galloway were rents on a 2 bed house increased by 12.7%. A tenant in one of those houses would have saved around £43 a month under the cap and tenants in Glasgow – where rents are amongst the highest in Scotland – would have saved £27 per month under the cap. On the other side of the coin though, had the cap become a target to chase, tenants in Dundee (where rents apparently decreased slightly last year) might have seen their rents go up by £76/month more than they actually did and in Lothian (where rents ARE the highest in Scotland) tenants could expect to have seen rents on 2 bed houses go up by £58 more than they actually did.
The current proposal for linking rents to above inflation rises is likely to only take the edge off of already high rents and may well harm tenants with rent rises in excess of what they would have otherwise expected. While we continue to support efforts to improve the lives and rights of tenants in Scotland, this particular approach is no longer the way to do it as it doesn’t fix fundamental problems with the private rented sector. Scotland needs a rent control system linked to the quality of housing and needs to bring already too-high rents down to affordable levels.